What is cryptocurrency? You may be hearing it talked about everywhere, but not have any understanding of what it is or how it’s created.
Many savvy investors in the tech sector have been able to get in on the ground-floor by actually creating more of these coins. They do this by a process called “mining” and today we’re going to discuss the details behind the process of how to mine ethereum.
What Is Cryptocurrency?
Cryptocurrency is digital money. It’s a recent technology that looks like it’s here to stay and will change the face of our economy as we know it. They are usually referred to as “coins” and one of the reasons they’ve become so popular is they are the first truly secure form of digital currency.
Other digital currencies were attempted in the past, but major coins like bitcoin and ethereum are the big winners. They’ve figured out how to have a secure, encrypted online ledger of all the coins in circulation. This helps establish the value of 1 bitcoin, or 1 ethereum, which is instrumental in its success as a viable currency.
Where’s The Mine?
Now, I know when you hear the word “mine” you probably think we’re going down into a cave somewhere with axes and shovels. That’s simply not the case with cryptocurrency.
This type of mining occurs in the digital world. Your computer is presented with complex math problems to weed out fake transactions on the ethereum network.
How To Mine Ethereum
If your computer can effectively solve the problem, congratulations! You now have a fresh, new coin. Anybody can set up their computer to solve these problems and gain ethereum, but it’s a complex process.
All ethereum transactions occur on what’s known as the blockchain. It’s the job of the miners to prevent fake transactions from occurring, as I mentioned earlier. This is why it can take some time for a cryptocurrency transaction to be processed.
Once a miner has “solved” the complex math problem they’ve been presented with, they let all of the other miners know that they think they’ve solved it. (This is all done through computer code).
If 51% of the mining community checks the original miner’s work and finds it to be correct, a new block is added to the blockchain.
This block holds all of the newest transactions done in ethereum. Thus, by adding more blocks to the blockchain, miners unleash more ethereum into the marketplace.
If you’re wondering how long it takes to mine 1 ethereum, the process takes approximately 60 days on average.
Best Mining Method
Experts say the best way to get involved with ethereum mining is through something known as the pool method.
To effectively mine ethereum, or any other cryptocurrency, you need dozens, if not hundreds, of mining rigs. A crypto mining rig is basically a giant supercomputer.
If you were to try to do this on your own, you would need to rent out a building just for your mining operation. That’s why pool mining becomes the best option.
A pool of investors combines their resources to mine ethereum. There is a fee to be involved, known as a pool fee, and there is also a minimum payout. This is the minimum amount of crypto that must be mined before you see it hit your digital wallet.
Be sure to do your research on pool fees and minimum payout requirements before joining a pool mining operation.
Take The Next Step
Once set up, an ethereum mining operation can be very profitable. As with all investments, do your research and make sure you know what you’re doing before risking money in the process. If you’d like to learn more about how to mine ethereum, you can visit us online find out more.